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Testbankto accompany

Contemporary Issues in Accounting

Michaela Rankin, Patricia Stanton, Susan McGowan, Matthew Tilling,

Kimberly Ferlauto & Carol Tilt

Prepared byMatt Tilling

© John Wiley & Sons Australia, Ltd 2012

Testbank to accompany Contemporary Issues in Accounting

Chapter 12 International Accounting

Multiple Choice Questions

1. To what does International Accounting refer?

a. Descriptions of accounting practices in different countriesb. Comparison of accounting practices between countriesc. Accounting for international transactions*d. All of the above

Correct answer: d Learning Objective 12.1 ~ Discuss the nature of international accounting.

2. Which of the following is NOT a level that can be used to define international accounting?

a. Supranationalb. Companyc. Comparative*d. None of the above, i.e. they are all levels of international accounting.

Correct answer: d Learning Objective 12.1 ~ Discuss the nature of international accounting.

3. With harmonisation of accounting practices globally

a. International accounting differences have all but disappeared*b. Environmental and cultural factors still lead to diversity in practicec. Financial reporting is becoming simplerd. All of the above

Correct answer: b Learning Objective 12.2 ~ Outline evidence of the diversity of international accounting practice.

4. Which of the following is likely to influence accounting systems at a national level?

a. Tax systemb. Political systemc. Capital market structures*d. All of the above

Correct answer: d Learning Objective 12.3 ~ Explain the environmental, cultural and religious factors that lead to diversity of international accounting practice.

© John Wiley & Sons Australia, Ltd 2012 12.1


5. In countries where finance is mainly provided by banks we would expect:

a. More lenient bankruptcy laws*b. Greater emphasis on the balance sheetc. More public disclosured. All of the above

Correct answer: b Learning Objective 12.3 ~ Explain the environmental, cultural and religious factors that lead to diversity of international accounting practice.

6. The accounting regulation is heavily influenced by the legal system in which is operates. In Australia laws are based on which legal system?

a. Civil Law*b. Common Lawc. Codified Roman Lawd. Case Law


7. The work of Hofstede has been very important to the study of international accounting, which of the following was NOT one of his cultural characteristics used to describe cultures around the world?

a. Masculinity versus Femininity*b. Organised versus laid-backc. Individualism versus Collectivismd. None of the above, i.e. they are all cultural characteristics


8. Gray adapted Hofstede’s categories for accounting, which of the following is not one of his four accounting values?

a. Uniformity versus Flexibilityb. Secrecy versus Transparencyc. Conservatism versus Optimism*d. Short-term versus Long-term Orientation

Correct answer: d Learning Objective 12.3 ~ Explain the environmental, cultural and religious factors that lead to diversity of international accounting practice.



9. One of Gray’s accounting values is Professionalism versus Statutory Control. Which country would you expect to be closest to the Statutory Control end of the spectrum?

a. Australia*b. Francec. UKd. USA


10. One significant barrier to the adoption of international accounting standards in Islamic countries has been:

*a. The prohibition on charging interestb. Refusal to compartmentalise religious and secular lifec. The requirement to pay zakat (a religious levy)d. All of the above

Correct answer: a Learning Objective 12.3 ~ Explain the environmental, cultural and religious factors that lead to diversity of international accounting practice.

11. Which of the following is NOT considered a challenge for international business operations when faced with accounting diversity?

a. It is costly to restate financial statementsb. It reduces access to international investments*c. National accounting regimes are inferior to international accountingd. None of the above, i.e. they are all a challenge

Correct answer: c Learning Objective 12.4 ~ Discuss international adoption of IFRSs, explain the difference between harmonisation and convergence and identify the benefits and limitations of IFRSs adoption.

12. The international Accounting Standards Board’s objective for International Accounting Standards would be best described as

*a. Adoptionb. Harmonisationc. Convergenced. Adaption

Correct answer: a Learning Objective 12.4 ~ Discuss international adoption of IFRSs, explain the difference between harmonisation and convergence and identify the benefits and limitations of IFRSs adoption.



13. Which of the following is NOT an advantage to IFRS adoption?

a. It is a cost effective way to have a comprehensive set of standardsb. It makes financial statements more comparable*c. It makes accounting standard development more flexibled. None of the above, i.e. they are all advantages


14. Which of the following elements or standards has been raised as a significant problem with the adoption of IFRS in certain countries?

a. Consolidation requirementsb. Fair value accountingc. Profit focus*d. All of the above

Correct answer: d Learning Objective 12.4 ~ Discuss international adoption of IFRSs, explain the difference between harmonisation and convergence and identify the benefits and limitations of IFRSs adoption.

15. In Australia IFRSs are required to be used by:

*a. All reporting entitiesb. All listed entitiesc. Consolidated entities onlyd. Multinational Entities

Correct answer: a Learning Objective 12.4 ~ Discuss international adoption of IFRSs, explain the difference between harmonisation and convergence and identify the benefits and limitations of IFRSs adoption.

16. China’s acceptance of international accounting standards would be best described as:

a. Adoptionb. Harmonisation*c. Convergenced. Indifference




17. The SEC allows non-US companies listed on a US stock exchange to report using:

a. Their home country’s standardsb. International Accounting Standards, with a reconciliation to US-GAAP*c. International Accounting Standardsd. None of the above, they must use US-GAAP only

Correct answer: c Learning Objective 12.6 ~ Evaluate the impact of international accounting and tax issues on multinational enterprises.

18. As of 2012 which US – IFRS convergence projects are a priority?

*a. Leasesb. Accounting for Income Taxesc. Emissions trading schemesd. All of the above

Correct answer: a Learning Objective 12.6 ~ Evaluate the impact of international accounting and tax issues on multinational enterprises.

19. Multinational entities

a. Are largely unaffected by the culture of individual countriesb. Operate independently of any national legal frameworkc. Use IFRS exclusively*d. None of the above

Correct answer: d Learning Objective 12.6 ~ Evaluate the impact of international accounting and tax issues on multinational enterprises.

20. Transfer pricing has been identified as a major problem for multi-national entities. This refers to:

a. Setting up parent entities in tax havens*b. The pricing of goods and services exchanged within a corporate groupc. Paying local workers less than expatriate employeesd. Manufacturing cheaply in the third world to sell at high profit in the first

world

Correct answer: b Learning Objective 12.6 ~ Evaluate the impact of international accounting and tax issues on multinational enterprises.


Economy & Finance

Ch12 tb rankin